Canada Needs To Return To The Gold Standard

A 1oz Canadian Maple Leaf Gold Coin, dated 2020. Royal Canadian Mint.

There is no doubt that the continued collapse of the global economic system has revealed a multitude of systemic flaws that are present in the way business is conducted. Consequently, it has been indicated that reform is desperately needed for Canada to recover and grow in the future. That being so, it has been said that the country certainly needs to return to the gold standard, and this is something that every Canadian need to hear.

Now, when mentioning it, it is necessary to answer the following question, What is the gold standard? In this way, it is understood that it is not something that many were alive back then to see, so it is understandable if it does not have the same resonance in the public consciousness as Brian Mulroney or Pierre Trudeau. Simply put, gold supports the value of the coin under a standard gold system. A country sets the price of gold and buys and sells gold at that price. Countries that trade with each other will settle their accounts by transferring gold.

A pattern that goes back a long time

It should be noted that the gold standard has a long history, even from Roman times, but the most notable example of the gold standard was during the 19th century. For most of that century and a few decades after the twentieth century, virtually all countries had a gold standard or linked their currencies to a country that did. As a young colony before the Confederacy in 1853, the province of Canada did just that and linked the Canadian dollar to the British gold sovereign and the American eagle. This period was what economists and historians call the classical gold standard.

Now it is considered that we have long mistakenly believed that increasing the money supply means greater wealth which is really far from the truth. In reality, we become poorer each time more money is created out of thin air. The gold standard does not have this problem and it is that with it the gold reserves of a country regulate the money supply. If Canada sets the price of gold at $ 1,000 an ounce, then the Canadian dollar would be worth 1/1000 of an ounce of gold.

The main benefit of the gold standard is that it limits the effect that volatile and imperfect human beings can have on our monetary and fiscal policy. Nineteenth-century governments understood that something as serious as monetary policy should not be left solely to bankers and politicians sitting on ivory towers.

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Source: Koltyn Wallar | Medium